2008- A Dickensian Christmas: And that’s not good

Dickens’ “A Christmas Carol” was written in 1843 Victorian London at a time when there was a surge in the poor due to the economic upheaval produced by the Industrial Revolution. The novella “A Christmas Carol in Prose, Being a Ghost Story of Christmas” has become the definitive Christmas story and it along with Clement Clarke Moore’s “The Night Before Christmas” are the cornerstones of our modern idea of Christmas. Clearly all wasn’t rosy in Dickens’ London- just think of Bob Cratchit, Oliver Twist, the grim reality of hand-to-mouth factory existence portrayed in “David Copperfield”- the list goes on.

We have romanticized Dickens’ Christmas. It was after all a jolly, food-filled, wine-soaked time for merry making; that is if you were rich. For the rest- “Are there no prisons? Are there no workhouses?”

2008 is truly a Dickensian Christmas- but not because of the feasts, but because of the heartache and the growing number of people that simply cannot make ends meet.

The facts are sobering:

According to a recent article posted at” USA Today” Net worth for families has decreased 11% in the past year.

According to the “Wall Street Journal “, in December 2007 the official unemployment rate was 5% and in November 2008 that metric raised to 6.7%. But that’s not really an accurate picture. The same article The Labor Department calculates a broader unemployment statistic (U-6) which includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule). In November 2007 this broader measurement was 8.4% and in November 2008 hit 12.5%.

A record 1.35 million homes were in foreclosure in the third quarter of 2008, driving the foreclosure rate up to 2.97%, according to the Mortgage Bankers Association. That’s a 76% increase from a year ago, according to the group’s National Delinquency Survey. At the same time, the number of homeowners falling behind on their mortgages rose to a record 6.99%, up from 5.59% a year ago, the association said.
This means that one in 10 borrowers in America are either delinquent or in foreclosure.

Homelessness is growing exponentially. According to a December 23, 2008 New York Times article, the number of homeless families with children entering New York City shelters hit a record high last month, climbing more than 40 percent from the same period last year, according to figures released on December 22nd by the Department of Homeless Services.

The total number of homeless families living in New York’s municipal shelter system at the end of last month also hit a record high of 9,720, the highest number since the city began reporting such data more than 25 years ago, according to the Coalition for the Homeless, an advocacy group that analyzed the city’s monthly report on homeless services.

Food bank utilization is up and donations are down. Donations to many of the USA’s food banks are not keeping pace with growing demand as the sour economy forces more people to seek help, charitable organizations say. “We have seen a 100% increase in demand in the last year … and food donations have dropped precipitously,” Dana Wilkie, CEO of the Community Food Bank in Fresno, CA said.

According to “Bureau of Justice Statistics Prisoners in 2007” as of year-end 2007, a record 7.2 million people were behind bars, on probation or on parole. Of the total, 2.3 million were incarcerated. More than 1 in 100 American adults were incarcerated at the start of 2008.

According to the National Center for Children in Poverty, after nearly a decade of decline in the 1990s’, the number of children living in low-income families has increased significantly since 2000. According to their most recent report over 13 million children in the United States—18% of all children—live in families with incomes below the federal poverty level—$21,200 a year for a family of four. Research shows that, on average, families need an income of about twice that level to cover basic expenses. Using this standard, 39% of children live in low-income families.

There are 46.5 million Americans with no health insurance in 2007- that is 15.3% of all Americans. A paper by E. Warren Himmelstein on healthaffairs.org- “Illness and Injury as Contributors to Bankruptcy” “ found that 50 percent of all bankruptcy filings were partly the result of medical expenses. Translation- every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

The rate of bankruptcy filings among those 65 and older has more than doubled since 1991, according to a study for AARP’s Public Policy Institute. . The most startling rise occurred among those ages 75 to 84, whose rate soared 433% since 1991.

A plunge in personal net worth, an alarming rate of unemployment, a staggering number of foreclosures, exponential growth in homelessness, the desperate increase demand on and decreasing inventory of food banks , a bulging prison population- the highest incarceration rate in the nation, lack of heath coverage leading to bankruptcy- especially among the elderly and outrageous rates of child poverty that have increased dramatically during the Bush era.

Many parallels can be made between the Wall Street “masters of the universe” that are directly responsible for the plummeting economy thanks to their sleazy unregulated greed and Ebenezer Scrooge. But that correlation is too easy. It is the need and want of our society that is the truly unfortunate analogy to Dickens. Thank you George W. Bush.

But with the hope generated by the incoming Obama administration, I guess Tiny Tim’s oft quoted line of hope resonates today as it did in the dismal London of the 1840’s. “God bless us, every one.” He has his work cut out for him and no matter how you voted- we must all pray he succeeds because we all have a stake in that success.

Responses

Alligator, I hope, like you, that the new year will bring an uptick in our economy and prosperity.

The problem is that what we see now is a necessary economic adjustment wrought by an over-indulgence of risky inventments called sub-prime mortgages.

I agree that lenders are partly at fault for creating and selling too much financial risk into our economy and the world economy.

But, that being said, it appears that the impetus for the current meltdown appears to have started 10-15 years ago during the Clinton adminstration.
During that time, government entities Freddie Mac and Fannie Mae started buying, for the first time, sub-prime loans in the name of ‘social justice’ and the ‘right’ for people to have a home whether they could afford it or not.

The Community Reinvestment Act of the Carter era also played into this as a negative economic influence on banks. It was further revised by the Clinton regime to lower the lending standards of CRA even further.
If they didn’t make risky loans, they would face charges of racism and local govenment impacts on mergers or zoning.

In the end, Freddie and Fannie have contributed over 5 trillion dollars of risky debt to the meltdown. With the government’s implicit endorsement of bad financial mortgages, private lender’s jumped in enthusiastically to avoid missing the profits.

So, it’s no surprise that, in the name of ‘social justice’, we have a financial meltdown.

As for the upcoming administration, I hope Obama governs from the center. If not, we face further economic damage and downturns. Since no one knows how he WILL govern, we can only wait and see.

While I agree that some of the regs instituted under Democrats play into the problem, Bryan, there were 20 years of Republican administrations between the Carter administration and now, and 8 years since the end of the Clinton administration with a Republican President.

Action could have been taken. If we’re placing blame on politicians, you can’t seriously leave out those who are currently in office.

Anyway … Great post, Randy. It’s amazing how popular “A Christmas Carol” is, how many people know the story, at least somewhat, and yet people don’t see how to apply it.